THIS MONTH’S ISSUE
Wake Up: Energy is a Growth Business
We’re entering a busy time of year here at Energy & Income Advisor. It’s quarterly earnings season, a time when we listen to earnings calls from dozens of energy companies – producers, refiners, midstream energy firms, services companies, and supermajors like Exxon Mobil (NYSE: XOM) to name just a few. For me at least, quarterly earnings unofficially season kicks off with SLB (NYSE: SLB) – a company I just can’t quite seem to stop calling Schlumberger at conferences and on interviews – which is due to report this year on April 19th before the market open (that’s this Friday). My typical routine is to create a list of stocks I’m watching closely each quarter, usually a mix of names I always follow closely like SLB and some other watchlist stocks I follow more casually. And, for the producers, I typically create a basic cash flow model of capital spending, costs and production to derive a rough valuation target. I also usually catch up on any Wall Street research out there, comparing the consensus models and forecasts to my own. In doing that work this quarter it struck me that I, like most analysts who follow the sector, have taken to...
Live Chat
with Elliott Gue and Roger ConradOn 04/30/2024
The First Six Reporters—Favorable Portents for Second Half 2024 and Beyond.
In the Energy and Income Advisor issue earlier this month, we highlighted a fundamental fact about oil and gas in spring 2024: Investors have not yet woken up to the fact that energy is a growth business. The popular misconception that oil and gas are being rapidly phased out is at the core of energy stocks’ historically low valuations and therefore S&P 500 under-weightings. And the misperception is all the more remarkable considering we’re now about four years into the current up-cycle. In previous cycles at this stage of the game, producers have been starting to focus less on controlling...
Endangered Dividends List
Endangered Dividends List companies are vulnerable for one or more of the following reasons: Cash flow coverage of distributions is inadequate. Elevated debt levels with imminent refinancing needs. Revenue pressure triggered by weakness for at least one key asset. Inability to access the equity market on favorable terms to fund capital spending, forcing management to utilize more internally generated cash flow. Exposure to volatility in commodity margins from either rising or falling prices of raw materials. Aggressive general partners anxious to buy in limited partners’ cash flows at discounted prices. Regulatory reversals. Expiring contracts with little hope for renewals at...
What We’re Looking For in the Rest of Q1 News and Numbers
Seven Model Portfolio companies have now announced their Q1 earnings and updated guidance. We highlight their results in the feature article, along with what they mean as bellwethers for the rest. Here’s when to expect the rest for Model Portfolio and High Yield Energy List companies. The first date is the announced date of the earnings release and guidance call. The second shows when to expect the next dividend declaration. Companies with an asterisk (*) indicate likely dividend increase announcements: Alliance Res Part (NSDQ: ARLP)—April 29, July 26 Black Stone Minerals (NYSE: BSM)—May 6, July 25 Cameco Corp (TSX: CCO,...
Meet Our Editors
Elliott H. Gue
Founder and Chief Analyst
Since earning his bachelor’s and master’s degrees from the University of London, Elliott has dedicated himself to learning the ins and outs of this dynamic sector, scouring trade magazines, attending industry conferences, touring facilities and meeting with management teams.
Roger S. Conrad
Founder and Chief Analyst
Roger S. Conrad has successfully advised income investors since the 1980s, with a nationally acclaimed sector specialty in utilities, telecommunications and energy. He’s a managing partner of Capitalist Times author of Power Hungry, independent director of NYSE-listed Miller Howard High Income Equity Fund and contributing editor to Forbes.com.
